We talk about probate a lot, and just like everything else, it can be a little too much to deal with. So, what if you don’t want to deal with any of that? Is there a way for you to avoid it altogether?
In fact, there is!
Let’s start with Revocable Living Trusts:
- Revocable Living Trust
Living trusts were created to give people a way around the probate process. One particular advantage to having any valuable property in a trust is the fact that it is not considered to be part of the probate estate. Keep in mind, though, that this is counted as part of the estate for federal tax purposes.) This is because someone called the trustee, and not you as an individual, owns any property left in the trust. After you pass away, the trustee can both easily and quickly pass the property in the trust to whomever you left it to—and avoid the probate process. You can also specify in the trust document who you want to inherit the property, like family or friends (just as you can in a will).
- Pay-On-Death Accounts and Registrations
One interesting thing you are able to do with any bank accounts or retirement accounts you have is that you can convert them into Pay-On-Death accounts. All you need to do is fill out an easy form and then list somebody to be the beneficiary. At the time of death, any money in these accounts will go directly to the listed beneficiary (and avoid the probate process). You can also do the same thing with security registrations, and even vehicle registrations (though only in some states). Some states also allow for P.O.D. real estate deeds that use a deed that doesn’t come into effect until your death.
So, here are just a couple of ways to avoid the probate process, but let’s look at a few more:
You can avoid probate simply by jointly owning property or by giving gifts. Let’s go into a bit more detail on each of those things below.
- Joint Ownership of Property
This method gives you a quick and easy way to completely bypass the entire probate process whenever the first owner passes away. There are, in fact, several ways that this can be accomplished. To take title along with someone else and avoid probate, all you have to do is state on the ownership papers (like a real estate deed, for instance), how you want to hold the title. Normally, no other documents are needed, and when one of the owners passes away, the property then transfers over to the joint owner, without ever having to worry about probate. Let’s see some other ways to avoid probate below:
- Joint tenancy with the right of survivorship
Any property owned in joint tenancy will pass automatically to the surviving owner when one of them dies.
- Tenancy by the entirety
In some states, married couples may often take a title not in joint tenancy, but in what is known as “tenancy by the entirety.” It is similar to joint tenancy, but only married couples may use it. Even same-sex partners may do it in some states, so long as they have registered with the state. Both ways avoid probate in exactly the same way.
- Community Property with right of survivorship
People in the following states: Alaska, Arizona, California, Idaho, Nevada, Texas or Wisconsin may be able to claim community property with right of survivorship if they are married and co-own property with their spouse. In this way, if one spouses passes, the other automatically owns any assets upon death. In California, those with a same-sex partner may also doo this as long as a domestic partnership has been registered with the state.
To finish our simple guide on how to avoid probate, let’s check out a couple of different ways to avoid probate if you have a small estate.
The truth of the matter is that if your estate is small enough, you may not even have to worry about probate at all. Almost every state now offers something in the way of shortcuts, or even ways around probate altogether in some cases, for small estates. Although, be aware that each state defines that term differently, so check out the rules and regulations for your state.
Two basic shortcuts for small estates are:
- Claiming Property with Affidavits
If the total amount of value for everything is below a certain number, anyone who gets your personal property (that is, anything except for real estate) could potentially skip probate altogether. The exact amount can and does vary from state to state, though, and it can vary by quite a good amount.
If an estate qualifies, any inheritor may draw up a short document that states he or she is entitled by will or state law to a certain item of property. This document (the affidavit) is signed under oath. Then, whenever the institution or person holding the property (such as a bank where the deceased had an account) gets the required documents (the affidavit and a signed copy of the death certificate), it can then give out any monies or other property.
- Simplified Court Procedures
These are defined according to individual state laws and are a quicker, easier version of the probate process. Probate Court will still be involved, but it has much less control over settling an estate. In many states, these processes are even simple enough to handle without needing a lawyer. Because of this, they often save a lot of money and time.
If you or someone you love needs assistance with Elder Care law issues, call 856-281-3131. Let us help ease your stress and give you a plan.